Featured Image Credit: Bob Kreisel / Alamy. Gabriel Vergani / Alamy.
The Canadian government has announced they’ll be imposing a high-end tax levy on any organisation buying luxury vehicles, as part of their 2022 tax budget.
The Select Luxury Items Tax Act is set to apply to all new cars and aircraft that cost more than AU$110,000 (CA$100,000) and boats that exceed the price of AU$280,000 (CA$250,000).
The new rate will equate to 10 per cent of the full value of the item, and will go into effect on September 1, however, will also apply to any ‘written sales agreements’ made after January 1, 2022.
Not only will the new tax have a positive impact on the country’s environment, but those wealthy businessmen might have to just think twice before splashing the cash.
Fortunately for the rich, the government probably broke the news in the most Canadian of manners, politely and with a smile on their face.
The new law means retailers, importers, and manufacturers will have to register with the Canada Revenue Agency (CRA) on the first day of sale or importation.
Even if they’ve already registered as a recognised vendor.
The tax is part of several corporate tax measures introduced in the new Bill C-19 law, which aims to have a positive environmental impact.
Also included in these changes are tax reductions for profits made using zero-emission technology manufacturing.
Canada just unveiled a new tax on private jets, yachts, and luxury cars. The Select Luxury Items Tax Act will apply to all new cars and aircraft over $100,000, and boats over $250,000. The new rate will be 10% of the full value. America, you're up.— Fifty Shades of Whey (@davenewworld_2) July 31, 2022
Despite the practical benefits for mother nature, various experts and businessmen have criticised the move, raising economic issues and a potential loss of 900 jobs.
Anthony Norejko, President and CEO of the Canadian Business Aviation Association, said in a statement: “The economic impact of the luxury tax will be significant and have not been studied with a comprehensive understanding of our industry.
"Issues remain and crucially, we have lost faith in the constructive dialogue with government on decisions of vital importance to our members.
“We urge this government to return to the table and, at the very least, consult with our sector on reasonable timelines for tax policy changes that should not be punitive but indeed supportive for all Canadians.”
According to a Legislative Costing Note by the Parliamentary Budget Office, via Yahoo News, the new tax laws would generate AU$671m (CA$600m) in revenue over five years.
Taxing the rich more, what a wild concept.